Sheridan v. Page

United States District Court, D. New Hampshire

November 28, 2018

Robert Sheridan and Gabriele Meyerv.Leroy Page, et al.

ORDER

LANDYA
MCCAFFERTY JUDGE

This
suit arises out of plaintiffs' purchase of a log home kit
from defendant, Southland Log Homes, Inc.
(“Southland”).[1]Before the court is Southland's
motion to dismiss or stay plaintiffs' claims against it
pending mandatory arbitration. Doc. nos. 13, 13-1. Plaintiffs
object. Doc. no. 17. For the following reasons,
Southland's motion is granted.

Several
district courts in the First Circuit have taken a third
approach: determining on a case-by-case basis which of these
two standards apply based upon whether, in order to resolve
the dispute, the court must look beyond the complaint and
materials the court may ordinarily consider in resolving a
Rule 12(b)(6) motion. See Johnson & Johnson Int'l
v. Puerto Rico Hosp. Supply, Inc.,258 F.Supp.3d 255,
259 (D.P.R. 2017) (applying summary judgment standard where
both parties relied upon exhibits filed in the record outside
of the complaint and the court intended to reference those
materials in assessing the scope of the arbitration clause);
Somerset Consulting, LLC v. United Capital Lenders,
LLC,832 F.Supp.2d 474, 482 (E.D. Pa. 2011) (applying
Rule 12(b)(6) standard where defendants' motion to stay
relied upon arbitration clause in parties' consulting
agreement and that same agreement was attached to complaint
and formed basis of plaintiffs' claims).

Here,
Southland submitted two affidavits from its Chief Financial
Officer, see doc. nos. 13-2 and 21-1, and two exhibits, see
doc. no. 13-2, Exhs. 1 (sales contract) & 2 (list of
builders). Plaintiffs concede that the two exhibits are
“true” copies of the sales contract and list of
builders. Doc. no. 17 at 2. The court does not intend to rely
upon the facts attested to in the affidavits, but will rely
upon the sales contract and list of builders. These documents
are appropriate for consideration on a Rule 12(b)(6) motion
as they are incorporated by reference in the complaint, and
their authenticity is not disputed by the parties. Rivera
v. Centro Medico de Turabo, Inc.,575 F.3d 10, 15 (1st
Cir. 2009).

The
court will, therefore, resolve this motion using the Rule
12(b)(6) standard. Accordingly, the court will accept the
factual allegations in the complaint as true, and draw all
reasonable inferences from those facts in plaintiffs'
favor. See Wilson v. HSBC Mortg. Servs., Inc., 744
F.3d 1, 7 (1st Cir. 2014)(describing Rule 12(b)(6) standard).
A summary of those facts follows.

BACKGROUND

Southland
has its principal place of business in South Carolina, where
it manufactures log home kits. In January 2017, Southland
executed a sales contract with plaintiffs, who are residents
of Florida, for the sale of a log home kit to be delivered to
New Hampshire. Doc. no. 13-2, Exh. 1. On the first page of
the sales contract, and directly above the heading
“Sales Contract, ” the following language
appears: “NOTICE: ANY CLAIMS ARISING UNDER THIS
CONTRACT SHALL BE RESOLVED BY ARBITRATION PURSUANT TO
PROVISIONS OF THE UNIFORM ARBITRATION ACT § 15-48-10 ET
SEQ S.C. CODE.”[3] Doc. no. 13-2 at 4. Similarly, the sales
contract provides under the heading, “Terms of Our
Agreement”: “Any claims arising under this
contract shall be resolved by arbitration pursuant to
provisions of the South Carolina Uniform Arbitration Act . .
. .” Id. at 9. Under the subheading
“Arbitration, Venue and Governing Law, ” the
sales contract states: “This is a South Carolina
contract. . . . Any dispute must be settled by
arbitration.” Id. at 11. Then, it continues:

This Sales Contract is executed in and shall be governed by
and construed in accordance with the laws of the State of
South Carolina. Any claims or disputes, whether in contract,
tort, statutory, or otherwise, arising out of, relating to,
or in connection with, the Sales Contract shall be resolved
without resort to any form of class action by arbitration in
Richland County, South Carolina in accordance with the rules
of the American Arbitration Association.

Id.

After
execution of the sales contract, Southland assigned
plaintiffs a project manager, who sent them a list of
builders, doc. no. 13-2, Exh. 2, approved by an accreditation
business, Home Buyers. The sales contract contains a
reference to such a list:

Construction: You are solely responsible for construction of
your home. This includes the selection, contracting and
supervision of the builder for your home. We do not build
your home and strongly recommend that you have a written
contract with your builder. If you ask, we will provide a
list of builders, but it is our recommendation and your
responsibility to review their work. We do not recommend,
warrant nor approve any builder.

Doc. no. 13-2 at 9 (emphasis added). Plaintiffs selected a
builder, Leroy Page, from this list to construct their log
home in New Hampshire. Plaintiffs allege that Page and UWS
breached their contract with plaintiffs by ...

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